What are some of the clearest and fastest ways to cut costs moving into 2010? In conversations with customers of testing service providers this month and last, we've noticed organizations focusing on creating and enforcing strict quality governance approaches increasingly. Our research indicates that those who have done so are able to cut testing costs from as much as 35-40% to as little as 9% of pre-production development costs.
All too frequently, organizations generally engage in wasteful, inefficient approaches to requirements gathering, quality and change management, implementation, training and documentation plans. IT and the overall industry has talked about the need to improve quality process hygiene probably since the first irrelevant code was created, was re-worked, failed again, and was re-worked again. So why are companies shifting behavior? Why is the situation in 2010 different? The consequences of chaotic, exorbitant quality approaches for key software applications on which businesses depend is not merely noticeable now – the costs have become prohibitive – and regulatory compliance also demands management and governance. As a result of increased auditing and oversight of software projects, executives now notice the significant financial impact to the bottom line and are also avidly concerned about compliance issues; therefore, project managers IT departments are changing approaches and strategy.
A company with whom I spoke last week exemplifies what we've seen from a number of organizations over the past several months – a shift towards effective quality governance. This firm had the foresight to begin transitioning their quality governance practices 2-3 years ago. They mandated creation and sign off on key areas before IT projects could proceed – including requirements, technical specifications, documentation, training plans, unit testing, test case creation and management, implementation plans, training etc. Code would not be promoted to production unless these areas had been addressed -- created, validated, signed off on by management. At this company, the majority of quality and development staff approach projects this way now. It is "second nature" to go through those steps before promoting code to production. However, as is often the case, several renegade groups remain in the company who continue to think that they're "special" and don't have to work within those frameworks.
Although this organization outsources the majority of its development and testing, it retains "new technology" initiatives for in-house development. (This company found in the past that if they outsource key emerging technologies, the domain expertise goes to the external provider, and they have no means of retaining management or control of core emerging areas so they retain those projects internally.) However, the group of staff and less experienced project managers involved in this key technology project do not abide by the quality governance approaches established and in widespread use by nearly all the other teams. As a result, because the requirements for this project weren't properly established, they are constantly changing and the group is deluged with change requests. System Integration Testing (SIT) has been pushed back 5 times; tests cases have been rewritten more than a dozen times. Middle management made verbal commitments to comply with requirements which remain undocumented and untraceable so the target of requirements completion remains elusive.
Compared with other teams at the company however, the additional costs for quality management and disparities are increasingly obvious to upper management. As executives understand the explicit costs of the rework and the ways in which the organization is vulnerable from an auditing and a security perspective (compared to what they could have spent otherwise and the protection provided), behavior is shifting. "As we show them how much they're costing themselves through their own practices, it's getting their attention." The "ugly internal reports" and audits have impact in an economy where resources are highly constrained, margins remain thin and competitive pressures are fierce and unyielding (at best).
How are your organizations approaching the issues of quality governance? Are you and your teams shifting behavior? Do the internal audits have an impact, or are they being swept under the rug? What is the role that outsourcers play in helping to shift behavior? What sorts of projects do you cede to them and who maintains leadership and focus for quality initiatives? We look forward to dialogue and on-going research in these areas over the coming months.